Have you checked the height of the foot above the quilt surface?
You want it as low as possible without dragging on the fabric so that it keeps the thread from pulling the needle off center.
Also, what size needle are you using? A 90/14 topstitch is usually minimum. With FMQ you are stressing the needle by tugging on the thread laterally and a thinner needle will deflect more, possibly nicking the thread and thus causing it to shred.